Financial markets consolidate in Asian session on Monday, not only because we have a light calendar today but also because investors await European leaders' discussions about the debt crisis in the region. A German newspaper Der Spiegel reported that the ECB might decide at the September meeting to set yield limits on each member country's debt. In this week, the Fed will release the meeting minutes which might unveiled policymakers' views on the economic outlook in the US and their preference for adding further non-standard easing measures to the market. The minutes, together with the Beige Book and the Fed Chairman Bernanke's speech at the Jackson Hole Symposium (both due next week), might give the public a better picture about the Fed's action in September

According to the German newspaper Der Spiegel, the ECB would discuss at the September meeting about setting limits on yields of Eurozone sovereign debts through unlimited bond purchases. For this plan to materialize, the central bank would need to prepare buy all of Spain and Italy's present and future debt. Therefore, this would only be the last resort for the ECB. We caution that discussion about the matter does not mean members would agree on it. Meanwhile, we have received mixed messages from Germany's officials concerning assistance to Greece. While Finance Minister Wolfgang Schaeuble stated that there were limits to the aid that could be granted to Greece, Chancellor Angela Merkel said the country would consider easing the debt-ridden Greece's bailout terms.

The FOMC minutes due Wednesday will be the key for this week as these would a gauge on the Fed's next action. As policymakers decided to leave the monetary stance unchanged at the last week, we expect they mainly discussed main options if further easing is need. Possible measures they considered include extending the earliest date of the first rate hike, providing "exit guidance" on asset sales, cutting interest rates on reserves and QE3. The minutes, together with the Beige Book and the Fed Chairman Bernanke's speech at the Jackson Hole Symposium (both due next week), might give the public a better picture about the Fed's action in September.

Commitments of Traders:

With the exception of crude oil, speculators were bullish towards the energy complex in the week ended August 14. Net length for crude oil futures slipped -11 117 contracts to 193 382 while that for heating oil gained +7 389 contracts to 9 284. Net length for gasoline rose +3 052 contracts to 71 011. Net short for natural gas futures fell -6 625 contracts to 66 475.

With the exception of silver, speculators were bearish towards precious metals during the week. Net length for gold futures fell -1 196 contracts to 114 304 while that for silver added +1 907 contracts to 15 587. For PGMs, net length for platinum decreased -428 contracts to 18 527 while that for palladium dipped -168 contracts to 4 691.

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